In a new report titled "The Impact of Online Personal Finance Offering: The Good, the Bad, and the Ugly", TowerGroup analyst George Tubin finds the capabilities of new non-bank online personal finance web sites are of interest but raises concerns about whether the sites have "adequate fraud prevention capabilities to protect both the consumer and the bank from account takeover and identity theft."   » Continue Reading

TowerGroup will be holding a complementary webinar on mobile banking and payments on Thursday, June 19, from 12 Noon to 1 PM Eastern led by Charul Vyas, Analyst, Emerging Technologies.

TowerGroup has published a new report titled 'Pointing in the Right Direction: Rethinking Card Payment Rewards in a Challenged Economy' by Brian Riley, senior research analyst in the Bank Cards practice that examines existing reward and loyalty programs and explores how credit card issuers may rework their programs to inspire customers to maintain the terms of their accounts.   » Continue Reading

TowerGroup has published a new report titled "The Ignition of US Mobile Banking in 2008: Do the Core Banking Vendors Hold the Key?" that finds that core banking technology vendors have a big role to play in helping mid-tier and small institutions take advantage of the emerging mobile banking channel and that doing so will soon just be a cost of doing business.   » Continue Reading

TowerGroup has announced new research that "finds that the most critical driver for the successful evolution of mobile banking and payments will be the ability of financial institutions and mobile operators to balance ease of use with security.   » Continue Reading

TowerGroup says that "the U.S. subprime mortgage crisis has forced banks to enter 2008 in a reactive mode. New research from TowerGroup examining the top retail banking trends for 2008 finds that bankers are anxious on two fronts. First, they worry about unseen threats that may not yet have surfaced in their credit portfolios. Second, they fret over how their institutions can compete rationally during the volatile days ahead."   » Continue Reading

TowerGroup has announced new research that finds that, even though "long stalled by lack of adoption and a range of technical issues", mobile banking is finally coming into its own. "Banking over the mobile channel, especially when considered in the context of an evolution toward mobile payments, is now fast becoming a market mandate -- and is no less important than the dawn of Internet banking in the late 1990s."   » Continue Reading

A research report titled "Crediting Debit: How Debit Cards Will Grow in a Changing Environment" from TowerGroup concludes that "the debit card's increasingly dominant position as a payment vehicle will continue through 2009 and beyond. Prepaid cards will also continue their rapid growth as a result of foreclosures affecting credit scores and consumers continuing to require the benefits of payment card access."   » Continue Reading

TowerGroup has announced a new research report titled "Mobile Peer-to-Peer Payments: Verizon Wireless and Obopay Take a Short Step Down a Long Road" that finds that "while online peer-to-peer payments and their mobile counterparts are not new to the payments arena, the use of mobile devices to exchange payments between consumers is still in its infancy. The newly announced deal between Verizon Wireless and Obopay is novel, given the fact that a major U.S. mobile operator has chosen to partner with a startup technology vendor to support peer-to-peer payments by means of a downloadable application on mobile phones."   » Continue Reading

TowerGroup says that while historically private equity has not been strongly attracted to the technology companies serving the financial services industry, private equity firms are now "starting to see beauty in the financial technology sector, reflected in the value of its products, its revenues and its client base. Stickier revenue models, more spending by clients, and a global business environment that demands innovation will encourage private equity firms to take a closer look at the technology providers to the financial services industry, accelerating investment in this sector."   » Continue Reading

TowerGroup has announced a new report titled "Price Optimization: A Practical Guide to a Retail Bank Implementation" that finds that the "strategies and procedures used by most banks today to set prices remain too simplistic. Banks are still relying heavily on manual processes and so are prone to errors, and they often exclude consideration of a critical factor -- the consumer's price elasticity of demand."   » Continue Reading

TowerGroup has announced a new research report titled "Lessons in Loyalty: A Look Inside the American Express Rewards Program" by Brian Riley, senior analyst in the Bank Cards practice.   » Continue Reading

Matt Hamblen reports for Computerworld on comments made about mobile banking in the US by Tower Group analyst Bob Egan, in an interview after a keynote address at the consulting firm's financial services conference this week. Egan said currently only about "400,000 consumers are using mobile banking out of almost 240 million mobile phone users in the U.S."

TowerGroup has announced new research finding that the "adoption of online banking by U.S. consumers is going strong, outpacing growth rates for every other method of retail banking delivery" - including everything from ATM to call centers. The firm says that "the long touted promise of online banking is now hitting its stride."   » Continue Reading

TowerGroup has published new research concluding that "financial institutions offering wholesale banking as a line of business to corporations currently face unrelenting pressure from clients to improve their integration technology services."   » Continue Reading

TowerGroup has issued a research note titled "Micropayments: Turning Nickels and Dimes into Profits" that "illustrates how card use for micropayments reinforces and can deepen issuers' relationships with their customers, thereby indirectly enhancing profitability. Customer retention is directly linked to product usage. Ideally, frequent use of cards for small everyday transactions will lead consumers to use the cards for larger and more profitable transactions."

TowerGroup has published a new research report titled "Fraud, Virus and ID Theft: Mobile Malware Stands to Create a New Beginning" - saying that as the use of mobile devices for banking and payments increases, incidents of mobile virus and mobile malware are likewise going to be on the upswing.   » Continue Reading

TowerGroup has published a new report titled "Check 21 in 2007: The Year of Image Exchange" on bank adoption of Check 21 - predicting that 2007 will be the first year in which monthly check image exchange volumes surpass paper check presentment volumes.   » Continue Reading

TowerGroup reports that enterprise security today has become an everyday concern from the corner office to the boardroom -- and financial services institutions are finding it increasingly difficult to manage security in-house and asserts that now is the time for financial institutions to consider outsourcing the IT portions of security.   » Continue Reading

TowerGroup says that retail banks must begin to match the retail industry in how they interact with customer, process orders, and create relationships - or the future of banking could lead to a "powered-by" environment where banks compete for business on a per-transaction basis.   » Continue Reading

TowerGroup's Colin Kerr is out with a new report titled "Where's My Payment? Using Logistics Management to Drive an Enterprise View of Payments" - saying that "now is the time for banks to shift their view of payments processing - treating it as an enterprise-wide business rather than a service function."   » Continue Reading

TowerGroup reports that, "in 2007 and beyond, the global financial services industry will increasingly grapple with three major strategic shifts: reinventing financial services at its core; repurposing financial services relative to the global diversity of a changing customer base; and helping restore confidence in an uncertain world."   » Continue Reading

TowerGroup says it "expects gift cards to be a major hit again this holiday season. Combined gift card sales in the U.S. will exceed US$80 billion in 2006 -- a more than 20% increase over their 2005 level -- with the breakdown by segment as follows: Retail, $29 billion; Restaurant / Fast Food, $18 billion; Miscellaneous (gas, services, etc.), $12 billion, Universally accepted (i.e., bank-issued), $23 billion." TowerGroup notes that the unused value on these cards, often referred to as "breakage" in the payments industry, has a bigger impact on consumers than the combined total of both debit and credit card fraud.   » Continue Reading

New research from TowerGroup finds that although credit cards remain the most profitable product for banks, an overall decline in bank cards is signaling the need for banks to evolve their rewards strategies. According to TowerGroup, "since 2000 the bank card industry's dependence on rewards programs to attract and retain customers has increased significantly. While rewards have become an essential aspect of bank card business strategy and help increase card usage, customer retention and margins - they come with a cost to the institution in terms of overall profitability."   » Continue Reading

TowerGroup has announced new research examining the US merchant acquiring business - concluding that further concentration of the large merchant acquirers in the United States is unlikely and that growth opportunities are likely to come from competition either between U.S. acquirers or with those outside the United States.   » Continue Reading

TowerGroup has announced new research titled "Turbulence in the Global Economy: The Case for Peer-to-Peer Online Lending Exchanges" that finds that peer-to-peer online lending exchanges -- direct lending by investors to individual borrowers -- are emerging in the US and UK as an alternative platform to traditional savings and investment options, a trend they predict will have an impact on unsuspecting financial services institutions.   » Continue Reading

New research from TowerGroup, titled "Credit Card Profitability in a New World: Meeting the Challenge of Changed Consumer Behavior", finds that 2006 and 2007 will find US credit card issuers facing new revenue challenges and threats, and exploring innovative options to mitigate the impact of these challenges.   » Continue Reading

TowerGroup has announced a new report titled "Building a More Responsive Banking Industry: The Bell is Ringing, But Are Banks Salivating?" by Jim Eckenrode, managing director of Banking and Payments research.   » Continue Reading

TowerGroup has released a new report that concludes the largest U.S. banks (those with assets of $80 billion or more) have historically used an individually tailored approach to core banking systems that lack vital integration with the other core applications. These banks continue to show no indication of adopting new integrated core systems.   » Continue Reading

TowerGroup comments on the spin-out of Western Union from First Data Corp. as announced last Thursday.   » Continue Reading

TowerGroup has announced new research by senior analyst Beth Robertson that find that increased consumer comfort and familiarity with online bill payment will help drive consumers toward adoption of other online services -- such as bill presentment, the use of non-traditional payment options, or the use of online account applications -- in 2006.   » Continue Reading

TowerGroup has announced a new report titled "No More Straw Houses: The Feds Issue Guidance on Online Authentication".   » Continue Reading

TowerGroup has announced new research that concludes that "behavioral biometrics" is a low cost and unobtrusive technology that is poised for a surge in usage by financial institutions.

By using behavioral methods, institutions can verify the identity of users of an online banking site based on how they conduct a given activity, such as writing their signatures or typing their passwords -- rather than what they're writing or typing (i.e., the traditional username and password approach). As electronically transacted business increases in popularity, stronger forms of employee and user verification will become essential.

TowerGroup has announced new research examining the impact that phishing attacks may be having on fraud perpetrated at ATMs and debit POS locations that concludes that losses from fraud due to phishing runs about $81 million annually in the US.   » Continue Reading

Tower Group has announced some new research by senior analyst Ed Kountz regarding the implications of health savings accounts (HSAs) for financial institutions.

"The rise of these individual healthcare accounts comes at the intersection of two larger trends: the rise of electronic prepaid payments and the steady growth of healthcare costs," said Ed Kountz, senior analyst in the Bank Cards research service at TowerGroup and author of one report on the topic.

"A new pool of payments funds is being created, accessed by plastic payments cards. Conceptually, card-based accounts linked to an underlying asset management component could be a good product offering fit within a diversified financial institution, particularly those with a card-issuing business."

TowerGroup this morning reported on new research regarding enterprise fraud management in financial services firms - asserting that while many financial institutions fight fraud effectively in certain areas of their business, many do so poorly - if at all - across their full spectrum of products and services.   » Continue Reading

The Tower Group has announced new research into business-to-business payments that sees a tipping point fast approaching where checks will become the exception rather than the rule.

"With the growth of corporate electronic payments poised to explode, we are rapidly reaching a critical point in the transformation of domestic cash management," said Susan Feinberg, senior analyst in the Wholesale Banking research service at TowerGroup and author of the research. "Many business to consumer payments are already made electronically, and a majority of US corporations indicate plans to migrate the bulk of their business to business payments to electronics within three years."

Given this, Feinberg added, "there is a growing urgency for banking executives to reorient their check-centric product management and development focus, to facilitate payment and remittance processing in a complex world of rapidly converging payment methods."

The Tower Group has announced research results indicating that multiple state and federal regulatory efforts could jeopardize the success of prepaid products.

"Regulatory oversight is being pursued in the name of consumer protection. But the primary impact could be just the opposite," said Ed Kountz, senior analyst supporting the Bank Cards and Emerging Technologies research services at TowerGroup and co-author of the research.

"The Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board, Office of the Comptroller of the Currency (OCC), and individual states are examining whether to reshape existing laws to regulate prepaid. But as they do so, the lack of accurate definitions and the failure to develop a harmonious regulatory framework around the valid consumer benefits of such products could unintentionally stifle the growth of certain payment products in this category," he said.

The Tower Group has announced new research looking at the opportunities for mobile, Internet, and POS micropayment (less than $5) transactions including forecasting a market size of $11.5 billion in the US by 2009.   » Continue Reading

MasterCard Advisors, a subsidiary of MasterCard International, has announced the acquisition of Tower Group from Reuters.   » Continue Reading